Is engaging in unfair business practices a cause for Buildingstars to terminate the franchise agreement?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
BUILDINGSTARS may at its option, and without prejudice to any other rights or remedies provided for in this Agreement or at law or in equity, terminate this Agreement for "good cause". (Provided that state law permits BUILDINGSTARS to terminate earlier if the "good cause" constitutes a default which is not curable). Without limitation as to other situations, good cause for termination also exists if FRANCHISEE or any guarantor of this Agreement:
- (1) Does not perform any and all of the lawful terms, conditions, and obligations of this Agreement, or the Confidential Operations Manual; or
- (2) Commits any other act which constitutes good cause under applicable state law or court decisions; or
- (3) Engages in any illegal, fraudulent, unfair or deceptive business practice, which, in the opinion of BUILDINGSTARS, adversely affects the operation, maintenance, or goodwill of the franchise; or
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars' 2025 Franchise Disclosure Document, Buildingstars has the right to terminate the franchise agreement if the franchisee engages in unfair business practices. Specifically, Buildingstars can terminate the agreement for "good cause," which includes engaging in any illegal, fraudulent, unfair, or deceptive business practice. However, this is contingent on Buildingstars' opinion that the practice adversely affects the operation, maintenance, or goodwill of the franchise.
Buildingstars must provide the franchisee with at least ninety (90) days prior written notice of termination, although this timeframe may vary based on applicable state law. The notice must state the reasons for termination and give the franchisee an opportunity to address the issues. This clause protects Buildingstars' brand reputation and customer relationships by ensuring franchisees adhere to ethical business standards.
For a prospective Buildingstars franchisee, this means that maintaining ethical and fair business practices is crucial to avoid potential termination of the franchise agreement. It is important to understand what Buildingstars considers to be an "unfair" business practice and how it might affect the franchise's operation or goodwill. Franchisees should ensure they are compliant with all applicable laws and regulations to avoid any actions that could be perceived as illegal, fraudulent, unfair, or deceptive.